Business, 09.04.2021 01:00 jackiediaz

b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $5,400 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,900 debit.

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Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis.

Days Past Due

Total 0 1 to 30 31 to 60 61 to 90 Over 90

Accounts

receivable $570,000 $396,000 $90,000 $36,000 $18,000 $30,000

Percent uncollectible 1% 2% 5% 7% 10%

a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method.

Daley Company

a. The estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method is:

= $11,820.

b. Adjusting Journal Entry:

Debit Bad debts expense $6,420

Credit Allowance for Doubtful Accounts $6,420

To record bad debts expense and bring Allowance balance to $11,820.

c. Adjusting Journal Entry:

Debit Bad debts expense $13,720

Credit Allowance for Doubtful Accounts $13,720

To record bad debts expense and bring Allowance balance to $11,820.

Explanation:

a) Data and Calculations:

Ageing of Accounts Receivable:

Days Past Due

Total 0 1 to 30 31 to 60 61 to 90 Over 90

Accounts

receivable $570,000 $396,000 $90,000 $36,000 $18,000 $30,000

Percent uncollectible 1% 2% 5% 7% 10%

Allowance $11,820 $3,960 $1,800 $1,800 $1,260 $3,000

Bad Debts Expense:

Allowance for Doubtful Accounts:

b. c.

Unadjusted balance $5,400 credit $1,900 debit

Adjusted balance 11,820 credit 11,820 credit

Bad debts expense $6,420 $13,720

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b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume th...

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